Bloomberg News

Luvata Sees 5% Growth for Copper Products Demand in U.S., China

March 04, 2013

Luvata, the maker of copper components in everything from solar panels to zippers, expects demand for its products in the U.S. and China to rise by at least 5 percent this year.

A recovery in residential and commercial construction in the U.S. is driving demand for the company’s copper products, John Peter Leesi, chief executive officer, said in an interview March 1. Luvata expects “flat-to-small growth” in demand for its products in Europe in 2013 as the euro-area’s economy, which is battling the debt crisis, is seen failing to expand, he said.

“We see the market recovering and we remain hopeful and optimistic on the U.S.,” Leesi said in the company’s headquarters in Brentford, England. “Two sectors are very important to us - residential and commercial construction. We have now seen recovery in those sectors and that translates into business and orders for us.”

The U.S. housing industry is “structurally improving” and will become an important driver for copper demand and sentiment, while Chinese imports of refined metal will pick up in the next three to six months, Goldman Sachs Group Inc. said in a March 1 report. The Copper Development Association says construction generates about 40 percent of demand.

Global copper demand growth will accelerate to 3.7 percent in 2013 after the smallest increase in three years in 2012, Credit Suisse Group AG estimates in a Jan. 3 report. Demand in North America will expand 2 percent in 2013, while usage in China will grow 6 percent, according to the bank. China accounts for 41 percent of global consumption and North America makes up 9.9 percent, it said.

China

Air-conditioning shipments in China, Luvata’s second- biggest market after the U.S., will likely improve this year after a poor 2012 driven by construction and domestic infrastructure investments, Leesi said. The country’s air- conditioner output fell for the first time in three years in 2012, according to industrial production data.

“We believe there is a potential for this number to improve,” Leesi said. “We are rather positive about Asia, where China is an important market.”

Urbanization in India makes it “important” for the copper market, while the change there will be slower than China’s, Leesi said. India accounts for about 3 percent of global copper demand, according to Credit Suisse. The company sees “significant double-digit growth” in technical precision air cooling for data centers, including those in Bangalore, Leesi said.

To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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